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Labor Market Prospects, Search Intensity and the Transition from College to Work

Author

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  • Bas van der Klaauw

    (Faculty of Economics and Business Administration, Vrije Universiteit Amsterdam)

  • Aico van Vuuren

    (Faculty of Economics, Erasmus Universiteit Rotterdam)

  • Peter Berkhout

    (Faculty of Economics and Econometrics, Universiteit van Amsterdam)

Abstract

In this paper we develop a structural model for job search behavior of students entering the labor market. The model includes endogenous search effort and on-the-job search. Since students usually do not start a regular job before graduation but start job search earlier, our model is non stationary even if all structural parameters are constant. The model explains the common finding that a substantial share of individuals starts working immediately upon graduation. We estimate the model using a unique data set of individuals who completed undergraduate education in the Netherlands between 1995 and 2001. Our estimation results show that a 1 percent point decrease in unemployment rate increases wage offers with 3 percent, that there are substantial returns to work experience and that individuals devote less effort to job search than optimal. Employment rates at graduation could be increased from 40 percent to 65 percent if all individuals start job search 6 month prior to graduation.

Suggested Citation

  • Bas van der Klaauw & Aico van Vuuren & Peter Berkhout, 2004. "Labor Market Prospects, Search Intensity and the Transition from College to Work," Tinbergen Institute Discussion Papers 04-064/3, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20040064
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Cobb-Clark, Deborah A. & Frijters, Paul & Kalb, Guyonne, 2004. "Do You Need a Job to Find a Job?," IZA Discussion Papers 1211, Institute of Labor Economics (IZA).
    2. Aurora Galego & António Caleiro, 2009. "Understanding the Transition to Work for First Degree University Graduates in Portugal: The case of the University of Évora," Economics Working Papers 06_2009, University of Évora, Department of Economics (Portugal).
    3. Fougère, Denis & Pradel, Jacqueline & Roger, Muriel, 2005. "Does Job-Search Assistance Affect Search Effort and Outcomes? A Microeconometric Analysis of Public versus Private Search Methods," IZA Discussion Papers 1825, Institute of Labor Economics (IZA).
    4. Fougère, Denis & Pradel, Jacqueline & Roger, Muriel, 2009. "Does the public employment service affect search effort and outcomes?," European Economic Review, Elsevier, vol. 53(7), pages 846-869, October.
    5. Aurora Galego & António Caleiro, 2011. "Understanding the transition to work for first degree university graduates in Portugal," Notas Económicas, Faculty of Economics, University of Coimbra, issue 33, pages 44-61, June.
    6. Hägglund, Pathric, 2006. "Are there pre-programme effects of Swedish active labour market policies? Evidence from three randomised experiments," Working Paper Series 2006:2, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    7. Cobb-Clark, Deborah A. & Frijters, Paul & Kalb, Guyonne, 2004. "Do You Need a Job to Find a Job?," IZA Discussion Papers 1211, Institute for the Study of Labor (IZA).
    8. Gautier, Pieter A. & Moraga-González, José L. & Wolthoff, Ronald P., 2007. "Structural Estimation of Search Intensity: Do Non-Employed Workers Search Enough?," IZA Discussion Papers 3045, Institute of Labor Economics (IZA).
    9. Kathrin Bertschy & M. Alejandra Cattaneo & Stefan C. Wolter, 2009. "PISA and the Transition into the Labour Market," LABOUR, CEIS, vol. 23(s1), pages 111-137, March.
    10. Polona Domadenik & Dasa Farcnik, 2011. "Did Bologna reform improve school-to-work transition of graduates? Evidence from Slovenia," Investigaciones de Economía de la Educación volume 6, in: Antonio Caparrós Ruiz (ed.), Investigaciones de Economía de la Educación 6, edition 1, volume 6, chapter 40, pages 649-665, Asociación de Economía de la Educación.
    11. Yangyi Kwon & Jhong Yun (Joy) Kim & Andrew Keane, 2020. "The Structural Relationship among Career-Related Mentoring, Ambiguity Tolerance, and Job Search Effort and Behavior of Korean College Students," Sustainability, MDPI, vol. 12(21), pages 1-14, October.
    12. Jung-Yon Lim & Young-Min Lee, 2019. "Exit duration and unemployment determinants for Korean graduates," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 53(1), pages 1-14, December.
    13. Deborah Cobb-Clark & Paul Frijters & Guyonne Kalb, 2004. "Job Search Success: Comparing Job Offer Rates In and Out of Employment," Melbourne Institute Working Paper Series wp2004n13, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    14. Obbey Ahmed Elamin, 2018. "Impact of Informal Job-search on Wages for University Graduates in Egypt and Jordan," Working Papers 1272, Economic Research Forum, revised 19 Dec 2018.

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    More about this item

    Keywords

    business cycle; structural estimation; return to work experience;
    All these keywords.

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • I20 - Health, Education, and Welfare - - Education - - - General
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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